Survival Tech Financially Fit, Files for Rs 1K cr IPO

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Survival Tech Financially Fit, Files for Rs 1K cr IPO

Co Makes Products Substitute Imports From China

Survival Technologies has 3 plants in Gujarat, plans a third at Mahad in Maharashtra

MUMBAI, Dec 30 (The CONNECT) - Contract research and manufacturing services firm (CRAMS)  Survival Technologies Limited has filed its Draft Red Herring Prospectus (DRHP) with markets regulator Securities and Exchange Board of India (SEBI) to raise Rs 1,000 crore through an initial public offering (IPO).

The Mumbai-based company is engaged in the supply of specialty chemicals with multiple applications and many products that it sells domestically are import substitutes that were formerly imported from China.

According to a CRISIL report quoted in the DRHP, Survival Technologies is one of the most profitable companies manufacturing speciality chemicals in India in Fiscal 2022.

The public issue with a face value of Rs 2 per equity share consists of a fresh issue of equity shares worth up to Rs 200 crore and an offer-for-sale (OFS) of up to Rs 800 crore by Promoter and selling shareholders, which comprises up to Rs 544.41 crore by Vijaykumar Raghunandanprasad Agrawal, Rs 212.41 crore by Nimai Vijay Agrawal, and Rs 43.18 crore by Prabha Vijay Agarwal.

The Offer is being made through the Book Building Process. The company, in consultation with the lead bankers to the issue, may consider a Pre-IPO placement of specified securities for cash consideration. If such placement is completed, the issue size will be reduced accordingly.

JM Financial Limited, and ICICI Securities Limited are the book-running lead managers and Link Intime India Private Limited is the registrar to the issue. 

The proceeds from the fresh issuance worth Rs 175 crores will be used towards funding its working capital requirements and general corporate purposes.

Between April 1, 2007 and March 31, 2022, it had synthesized 677 products of which over 500 products have been commercially produced and sold to various customers across its export markets. Key application of its products are towards Agrochemicals, Cosmetics, Paints, Biotech, Pharmaceuticals, Polymers, X ray Films and Perfume industry.

Survival Technologies, key customers include multinational corporations such as Evonik Industries AG, Chori Co. Limited, BioSpectra Inc., LBB Specialities, Procos, MOEHS Iberica, S.L., Sumitomo Corporation, Synthetics USA, LLC, Alzchem Trostberg GmbH and domestic companies such as Lee Pharma Limited, MSN Laboratories Private Limited, Sai Life Sciences Limited, and Dr. Reddy’s Laboratories. As of June 30, 2022, it had served 201 customers.

It has three manufacturing facilities in Gujarat, two in Ankleshwar and a third in Sarigam. It is ISO and GMP certified and its facilities are equipped with advanced infrastructure including reactors and automated systems that ensure efficiency in its manufacturing process. It is planning a new manufacturing facility in Mahad, Maharashtra, to scale up its capacity/.

Survival Technologies operates in the speciality chemicals industry, with low-volume, high-value chemicals with specific applications classified based on end-user industries and competes with firms which includes Navin Fluorine International Limited, Alkyl Amines Chemical Limited, Aether Industries Limited and Neogen Chemicals Limited.

Survival Technologies’ revenue from operations increased by 13.46% from Rs 274.79 crore in Fiscal 2021 to Rs 311.78 crore in Fiscal 2022, attributable to an increase in revenue from contracts with customer, whereas profit after tax grew 30.43% to Rs 73.46 crore in Fiscal 2022, as compared to Rs 56.32 crore in Fiscal 2021.

For the three months ended June 30, 2022 revenue from operations stood at Rs 100.02 crore and profit after tax stood at Rs 24.88 crore.

India is the world’s sixth-largest chemical manufacturer, and accounts for 3.4% of worldwide chemical production. The Indian chemical industry was valued $ 178 billion in 2019 and is expected to increase to $ 304 billion dollars by 2025. The Indian chemical industry ranks sixth-place globally and fourth place in Asia. According to a CRISIL analysis, India ranks eighth in the world for chemical exports (excluding pharmaceutical products) and seventh for chemical imports (excluding pharmaceutical products).

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